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Global Employment Briefing: Finland, May 2017

  • Finland
  • Other

06-06-2017

Recent Amendments to Ease Employers’ Administrative and Financial Burden

The aim of the current Finnish government has been to ease the administrative burden of citizens and companies by abolishing unnecessary acts and regulations. However, also new measures have been taken in order to ease employers’ burden in certain situations. 

Notification Obligations in Relation to Dismissal on Financial and Production-related Grounds Removed

The amendments to the Finnish Employment Contracts Act (55/2001) and to a few other acts aiming at relieving the employers’ notification and clarification obligations came into effect on 1 May 2017. The amendments aim to reduce the workload and administrative burden of especially those employers who employ less than 20 employees.

Employers no longer have a duty, pursuant to Chapter 9 Sections 3, 3(a) and 3(b) of the Employment Contracts Act, to notify the Employment and Economic Development Office of dismissals on financial or production-related grounds. The employers do not have to provide the employees with information on Employment and Economic Development Office’s services and employment plan either. In addition the duty, in accordance with Chapter 5 Section 4 of the Employment Contracts Act, to notify the Employment and Economic Development Office on layoffs has also been removed.

However, the obligations set in the Act on Co-operation within Undertakings (334/2007) have not been amended. Thus, the employers who regularly employ at least 20 persons and are obliged to apply the Act on Co-operation within Undertakings still have a duty to notify the authorities as required by section 48 of the Act.

New Compensation for Employers for Costs of Family Leave

As of 1 April 2017 the employer of a female employee has been entitled to a lump-sum compensation of 2.500 euros, which is designed to cover for the costs arising from family leave. The amendment of the Health Insurance Act (1224/2004) intends to promote employment and equal treatment of women as well as more equal division of parenting costs between the employer and the government.

The compensation is paid for each pregnancy or adoption. The employer shall claim the compensation from the Social Insurance Institution (KELA) within six months from the end of the parental allowance period.

The conditions for obtaining the compensation are the following:

  • Maternity allowance or maternity grant has been paid to the employee.
  • The employer has paid salary to the employee for at least one month during the maternity allowance or maternity grant period.
  • The employment of the employee has lasted at least three months prior to the beginning of the maternity leave.
  • The employment contract is valid for at least a year. Also two or several consecutive fixed-term contracts will fulfil this requirement if these together last at least a year.
  • At the beginning of the maternity leave, the working hours of the employee are at least 80 % of the working hours of a full-time employee in the field.

In case the above mentioned requirements are fulfilled and the employee’s first day of maternity allowance or maternity grant period has been 1 April 2017 or thereafter, the employer is entitled to the compensation.

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